WPI Grad’s Manchester, NH Dyn Gets $38 Million Investment

Wednesday

Oct 3, 2012 at 9:00 AMOct 3, 2012 at 10:01 AM

By Peter S. Cohan WALL & MAIN

Last November, WPI graduate Jeremy Hitchcock talked with me about Manchester, N.H.-based Dyn Inc., when the Internet Infrastructure as a Service (IaaS) provider had 100 employees. But as of October 2, Dyn had raised $38 million in venture capital, was expecting $30 million in 2012 sales, and has 170 employees.

Before telling you his story, here’s some background on Dyn’s technology. It runs what is called a Domain Name System (DNS) – that’s a table that looks up a number that refers to a numerical address on a computer known as a server when you type in the address of a web, such as telegram.com. Dyn helps the Internet run better. One way it does that is by picking a numerical address for a server that’s close to your computer, so you get the content faster.

In an interview last November with Mr. Hitchcock, I learned that he was born in New York, but his parents moved to Manchester when he was about five years old. In 2000, the self-described math and science geek arrived with a scholarship at WPI. He planned to be a chemistry major but changed his mind – switching to a major in computer science and management information systems.

Around 2000/2001, Mr. Hitchcock got together with a group of four WPI friends and started working on what he called “an open source project,” but they were running out of money, so they put out a request for funds. Instead of raising the $25,000 they requested, they got $50,000, so they decided that they’d better not let down their contributors.

Next, they incorporated Dyn – short for Dynamic Network Services, Inc. – and in 2002 rented an office in the Worcester Business Center near Gold Star Boulevard in Worcester.

But in December 2003, Mr. Hitchcock and his buddies pulled up Dyn’s roots and planted them in Manchester. Why? They wanted to return home to build their company. And build it they have. Dyn now employs 70 percent more people than last year, the same rate at which Mr. Hitchcock reported its sales grew.

As he explained in an October 3 interview, Dyn now has “2,000 enterprise clients, Dyn also services 450,000 ecommerce clients and over four million active users.”

And since November, Dyn has added new customers like Angry Birds, Box, Spotify, TripAdvisor, Wordpress, Zappos, Zillow and Zipcar. They pick Dyn because its service is “better, faster, cheaper” and because it “looks more like the start-up companies that Dyn serves – providing them more responsive customer service and greater transparency than stodgier infrastructure rivals such as CA, EMC, and IBM.”

Mr. Hitchock points out that he has been “turning down offers to invest in or acquire Dyn for years.” He said that these other investors “put up a good dance, but were not straightforward.”

However, when North Bridge and the other investors came along, Mr. Hitchcock found that they made “a compelling offer, were very upfront, and they brought skills that would help Dyn scale.”

For example, Dyn’s board members now include someone “who knows scaling and has been there, done that; a polished quant, and Jason Calcanis – a constant disruptor with a product orientation.”

Dyn will use the money to hire more people and to expand globally. Mr. Hitchcock plans to hire 10 to 25 more people by the end of 2012 – 90 percent of Dyn’s staff is located in Manchester. NH. Moreover, Dyn will add people in functions such as software and network engineering, administrative support, sales, and client service along with experienced executives.

And he is looking to expand into Latin America – mostly by either opening sales offices that are staffed by people he hires, or by forming partnerships in those markets.

Now that Dyn has venture capital, those investors are going to be looking for a return. Mr. Hitchcock says that his goal is to “build the category and the company.” And he points out that this outside investment is sending a signal to Dyn’s people that he and the investors “want the company to be impactful and they should share their commitment to building a great company.”

Mr. Hitchcock has not abandoned Worcester. He mentioned that he was “still around WPI’'s User Experience Lab.” So WPI can claim some bragging rights for Dyn’s success – unfortunately, Worcester is not a beneficiary of the jobs Mr. Hitchcock is creating in Manchester.